South Korea Showcases Role as Donor at Expo 2012

UNITED NATIONS, Aug 1 2012 (IPS) - When South Korea took the initiative to integrate a development cooperation programme into this year’s World Expo, it stepped up its efforts to gain credibility as a donor on the international stage.

“The Expo is intended not only to enhance the public awareness of the dangers faced by the sea, but also to promote the need for international cooperation to turn these challenges into hopes for the future,” Ambassador Kim Sook the U.N. permanent representative of South Korea, told IPS.

The series of capacity building programmes, titled the Yeosu Project, is the first international cooperation initiative ever to accompany a World Expo, involving countries from Asia to Sub-Saharan Africa.

The Korean government plans to increase the percentage of “Green ODA” to 30 percent of its total ODA by 2020.

The East Asia Climate Partnership (EACP), set up by the Korean government in 2008 to facilitate international cooperation on climate change mitigation, currently has 20 projects underway in 10 countries.

In Mongolia, programmes numbering five in total include a water resource management project in the new town of Yarmag in Ulaanbaatar, a solid waste management project and a heating and hot water systems project.

“Such policy direction was well considered during the preparation process of the Yeosu Expo. Korea’s commitment to Green ODA will be materialised through the Yeosu Projects,” Kim told IPS

“For those developing countries keen to pursue a Green Economy path, the greening of ODA is likely to be welcome in terms of them accelerating and scaling up such ambitions,” Achim Steiner, U.N. Environment Programme (UNEP) executive director, told IPS.

Gaining donor credibility

The greening initiative coincides with a concerted effort on the part of the Korean government to scale up its development cooperation programme following its recent accession to the Organisation for Overseas Cooperation and Development Assistance Committee (OECD DAC) in 2010.

Mexico, Chile and South Korea are the only former developing countries to ever to have transferred into the DAC.

“As a recipient-turned-donor country, the Republic of Korea has made strenuous efforts to bridge the gap between developed and developing countries,” Kim told IPS.

Heavily reliant on foreign aid in the 1960s, Korea propelled itself from destitution following the Korean War to its current status as the thirteenth largest economy in the world.

According to government estimates, it received 12.7 billion dollars in the post-war period.

In response to growing interest from developing countries in learning from Korea’s development experience, the Korean government established the Knowledge Sharing Programme (KSP) in 2004 with the Korea Development Institute, and the Ministry of Strategy and Finance.

For sustainable development, “Knowledge sharing is crucial. No one country has all the solutions to large scale (climate) challenges; the perspective and experience of individual nations, including traditional knowledge can, through shared programmes, and the sharing of lessons learnt, act as a catalyst for action,” Steiner told IPS

“Not least by building confidence that addressing marine and climate change issues are not insuperable but infinitely do-able,” he added.

“Building on its commitment to South-South Cooperation, Korea has become a world leader in knowledge sharing,” David Arnold, president of the Asia Foundation, non-profit organisation working towards the development of the Asia-Pacific region, told IPS.

The government has also committed to doubling its development assistance by 2015.

“I am very proud as a Korean that Korea has now become a donor country in the world from a poverty-stricken, war-devastated country.” U.N. Secretary General Ban Ki-Moon said in his speech at the 2011 High Level Forum (HLF4) on Aid Effectiveness in Busan.

Tied aid, loans and MDGs

However, 75 percent of Korean ODA is tied aid, according to OECD statistics, which binds recipient countries to conditions that promote donor country products and exports.

While the DAC estimates that tying aid raises the cost of many goods, services and works by 15 to 30 percent, a U.N. study of bilateral aid to sub-Saharan Africa found that tying aid reduces the value of the aid by 25-40 percent.

Since embarking on a “Roadmap on Untying”, Korea has reduced tied aid from 98 percent in 2008 OECD statistics.

South Korean assistance to Least Developed Countries (LDCs) is also predominantly in the form of loans, which often foster dependency due to the inability of poorer countries to pay back the loan. LMICs on the other hand mostly receive grants, considered a more sustainable form of assistance.

A 2008 DAC review recognises that Korea’s emphasis on mutual cooperation “is important in understanding Korea’s thinking, and to some extent drives policy choices such as the heavy use of loans and tied aid”.

But the committee recommends that South Korea “maintains a focus on poverty reduction and contributes to the MDGs, by prioritising LDCs and low-income countries and using appropriate aid instruments”

An Asian perspective

At the HLF4 the Asian Approaches to Development Cooperation dialogue series raised the issue of “whether donor alignment around an agreed set of principles and approaches is desirable or possible” for Asian approaches, Arnold, who represented the Asia Foundations at the HLF4, told IPS.

Countries like Korea, India, China and Malaysia have been providing training and technical assistance to other countries since the 1950s.

Arnold highlighted some key similarities in Asian approaches such as mutual benefit with partners, responding to partner country requests, shared and sustained growth and capacity development.

“Millennium Development Goals (MDGs) are not often used to describe either the goals or indicators of development cooperation in Asia,” he said.

In a similar endeavour to avoid the aid-recipient dichotomy, “’Aid’ is rarely used to describe Asian cooperation partnerships and most countries do not consider themselves donors,” Arnold told IPS.

But “Asian approaches to development cooperation have mostly fallen under the radar of OECD DAC donors until recently,” he said.

Highlighting Korea’s key role in facilitating mutual North-South learning at HLF4 negotiations Arnold told IPS “Korea, as host, played a unique bridging role between donor and partner countries, between DAC and non-DAC donors, and between ‘Asian’ and ‘Western’ development partners.”

Balancing the bargaining tables of foreign aid, “Korea was instrumental in shepherding the Busan Partnership for Effective Development Cooperation and expanding the dialogue on development and aid effectiveness to include important emerging donors like China and India,” he said.